Dr. Hassan HR Management and the Corporate Brand
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Human Resource Management
and the Corporate Brand
Dr. Salah S. Hassan, Ph.D.
Professor of Strategic Brand Management
The George Washington University
hassan@gwu.edu
2
Agenda
•Global Thinking
•Global Opportunities
•Global Challenges
• From Global Vision to Local Action
•Managing Across Borders
• Selecting Global Managers
•Training and Development
•HR Management vs HR Strategy
• Systematic Focus Strategy
•Case 1: Best Buy
•Case 2: Marriott
3
Global Thinking
“No senior corporate executive should be promoted
to a position of leadership if he/she does not
demonstrate the ability to think globally”
Salah Hassan and Roger Blackwell
4
Global Thinking
Dimensions Practical Results
Understanding sources of demand
How to market to worldwide buyers
Understanding sources of supply
How to source globally & more effectively
Understanding the other point of view
and value system
How to add value and market effectively
and efficiently
5
Global Opportunities
•Economies of scale
•Market scope
•Brand leadership
•Universal brand image
• Leverage ideas globally
•Uniformity of HR Strategy
6
Global Challenges
•Cultural Differences
•Differences in HR development
•Unique talent pools and skill sets
•Economic growth & competitive environment
•Communication differences
7
Local Vs. Global Markets: Key Differences
Local Global
Markets are defined within country borders. Customers and competitors are of local origin
Significant differences exist among customers from different countries; segments are defined locally
Competition takes place among primarily local firms; even international companies compete on a country-by-country basis
Each local market operates in isolation from the rest; competitive actions in one market have no impact elsewhere
Strategies are locally based: little advantage exists in coordinating activities among markets
Markets transcend country borders. Customers and/or competitors cross frontiers to buy and sell
Significant similarities exist among customers from different countries: segments cut across geographic frontiers
Competitors are few and present in every major market: Rivalry takes on regional or global scope
Local markets operate independently: Competitive actions in one market impact other markets
Strategies are regional or global in scope: Great advantage exists in coordinating activities within regions or worldwide
Market
Boundaries
Customers
Competition
Inter-
dependence
HR Strategies
8
From Global Vision to Local Action
Concerned with losing competitiveness worldwide, Executive VP announces a major campaign of rationalization labeled the 5% program
Regional director for Europe targets harmonization of products and marketing strategies across the continent. Objectives: To reduce duplication and centralize Production of standardized products in “Euro-plants”
Area director for Northern Europe leads a task force for the region rationalized product and brand policies
A :Strategic Committee” of country managers agrees to let product group managers decide the specifics of product/brand rationalization and harmonized marketing strategies
Product group managers decide on reduced product diversity and prepare local action plans that incorporate standardized brands, packaging, product formulation, positioning, etc…
President
Executive Vice President
Area Director (Northern Europe)
Area Director (Southern Europe)
General Manager Benelux
General Manager
Scandinavia
General Manager
UK
Product Group
Marketing Managers
Product Group
Marketing Managers
Product Group
Marketing Managers
Regional Director (Europe)
Other Regional Directors
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Managing Across Borders
• Global corporation
Firm that has integrated
worldwide operations
through a centralized
home office.
• International corporation
Domestic firm that uses its
existing capabilities to
move into overseas
markets.
• Transnational corporation
Firm that attempts to
balance local responsiveness
and global scale via a
network of specialized
operating units.
• Multinational corporation
(MNC)
Firm with independent
business units operating in
multiple countries.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Increasing Importance of Understanding
Global Human Resources Management
International
Mergers and
Acquisitions
Global Human
Resources
Management
Foreign Human
Resources
Global
Competition
Market Access
Opportunities
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
How International Companies Affect
the World Economy
•Their production and distribution extend
beyond national boundaries, making it easier to
transfer technology.
•They have direct investments in many
countries, affecting the balance of payments.
•They have a political impact that leads to
cooperation among countries and to the
breaking down of barriers of nationalism.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
How Does the Global Environment Influence
Management?
•Unified Economies
Closely partnered nations such as the European
Union (EU) have developed into strong competitors.
Promotes job growth in trading nations.
•Cultural Environment
The communication patterns, religion, values and
ideologies, education, and social structure of a host
country influence how HR is conducted in that
country.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Cultural Environment of International Business
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Domestic versus International HRM
• Issues in international HRM in helping
employees adapt to a new and different
environment outside their own country:
Relocation
Orientation
Translation services
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
International Staffing
•Expatriates, or Home-country Nationals
Employees from the home country who are on
international assignment.
•Host-country Nationals
Employees who are natives of the host country.
•Third-country Nationals
Employees who are natives of a country other than
the home country or the host country.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Changes in International Staffing over Time
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Hiring Host-Country Nationals
• Advantages:
1. Hiring local citizens is generally less costly than
relocating expatriates.
2. Since local governments usually want good jobs
for their citizens, foreign employers may be
required to hire locally.
3. Most customers want to do business with
companies they perceive to be local versus
foreign.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Recruiting Internationally
•Work Permit, or Visa
Government document granting a foreign individual
the right to seek employment.
•Guest Workers
Foreign workers invited to perform needed labor.
•Apprenticeships
Vocational training programs in skilled trades.
•Transnational Teams
Teams composed of members of multiple
nationalities working on projects that span
multiple countries.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Selecting Global Managers
•Global Manager
A manager equipped to run an international
business
•Skills Categories for Global Managers
Ability to seize strategic opportunities
Ability to manage highly decentralized
organizations
Awareness of global issues
Sensitivity to issues of diversity
Competence in interpersonal relations
Community-building skills
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Comparison of Advantages in Sources of Overseas Managers
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Selecting Global Managers
1. Begin with self-selection.
2. Create a candidate pool.
3. Assess core skills.
• Skills considered critical
to an employee’s success
abroad.
4. Assess augmented skills
and attributes.
• Skills helpful in facilitating
the efforts of expatriate
managers
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Skills of Expatriate Managers
CORE SKILLS
Experience
Decision-making
Resourcefulness
Strategic thinking
Adaptability
Cultural sensitivity
Change management
Team building
Maturity
AUGMENTED SKILLS
Technical skills
Negotiation skills
Strategic thinking
Delegation skills
Change management
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Training and Development
•Essential training program content to prepare
employees for working internationally:
Language training
Cultural training
Assessing and tracking career development
Managing personal and family life
Repatriation
•Culture shock
Perpetual stress experienced by people who settle
overseas.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Training Methods
•Reviewing available information about the host
company: books, magazines, video tapes.
•Conversations with host country natives.
•Sensitivity training to become familiar with the
customs and overcome prejudices.
•Temporary assignments to encourage shared
learning.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Assessing and Tracking Career Development
•Developmental and Career Advantages of an
International Assignment:
Increases the expatriate’s responsibilities and
influence within the corporation
Provides a set of unique experiences beneficial to
both the individual and the firm
Enhances understanding of the global marketplace
Offers the opportunity to work on a project
important to the organization
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Global Compensation Challenges
•Different countries have different norms for
employee compensation:
Financial (money) incentives versus nonfinancial
incentives (prestige, independence, and influence)
Individual rewards versus collectivist concerns for
internal equity and personal needs
General rule:
Match the rewards to the values of the local culture—create
a pay plan that supports the overall strategic intent of the
organization but provides enough flexibility to customize
particular policies and programs to meet the needs of
employees in specific locations.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Hourly Wages in Different Countries*
*Hourly compensation costs in U.S. dollars for production workers in manufacturing.
COUNTRY $/HOUR
Norway 41.05
Denmark 35.45
Germany 34.21
Netherlands 32.34
Belgium 31.85
Sweden 31.80
Switzerland 30.67
Austria 30.46
Finland 29.90
Luxembourg 27.74
United Kingdom 27.10
Australia 26.14
Ireland 25.96
Canada 25.74
Italy 25.07
France 24.90
United States 23.82
COUNTRY $/HOUR
Japan 20.20
Spain 18.83
Greece 16.10
Korea, Republic of 14.72
New Zealand 14.47
Israel 12.98
Singapore 8.55
Portugal 7.65
Czech Republic 6.77
Taiwan 6.43
Hungary 6.29
Hong Kong SAR (1) 5.78
Poland 4.99
Brazil 4.91
Mexico 2.75
Philippines 1.07
Sri Lanka 0.54
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Compensation of Host-Country Employees
• Hourly wages can vary dramatically from
country to country.
• Pay periods are different.
• Seniority may be an important factor.
• High pay rates can upset local compensation
practices.
• Bonuses, profit-sharing, benefits and paid
leave may be more extensive and legally
required.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Compensation of Host-Country Managers
• Global Compensation System
A centralized pay system whereby
host-country employees are
offered a full range of training
programs, benefits, and pay
comparable with a firm’s
domestic employees but adjusted
for local differences
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Compensation of Expatriate Managers
• An effective international compensation program must:
1. Provide an incentive to leave the United States
2. Allow for maintaining an American standard of living
3. Provide for security in countries that are politically unstable or
present personal dangers
4. Include provisions for good health care
5. Reimburse the foreign taxes the employee is likely to have to pay (in
addition to having to pay domestic taxes) and help him or her with
tax forms and filing
6. Provide for the education of the employee’s children abroad, if
necessary
7. Allow for maintaining relationships with family, friends, and
business associates via trips home and other communication
technologies
8. Facilitate the expatriate’s reentry home
9. Be in writing
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Expatriate Compensation Systems
• Home-Based Pay
Pay based on an expatriate’s home country’s
compensation practices
• Balance-Sheet Approach
A compensation system designed to match the
purchasing power in a person’s home country
1. Calculate base pay
2. Figure cost-of-living allowance (COLA)
3. Add incentive premiums
4. Add assistance programs
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Expatriate Compensation Systems (cont’d)
•Split Pay
A system whereby expatriates are given a portion of
their pay in the local currency to cover their day-to-
day expenses and a portion of their pay in their
home currency to safeguard their earnings from
changes in inflation or foreign exchange rates
•Host-Based Pay
Expatriate pay is comparable to that earned by
employees in a host country to which the expatriate
is assigned.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Expatriate Compensation Systems (cont’d)
•Localization
Adapting pay and other compensation benefits to
match that of a particular country
Reduces resentment among local staff members if
they are earning significantly less.
•Other Issues
Adequacy of medical care
Personal security
Compensation policies of competitors
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Performance Appraisal
of International Managers
•Who Should Appraise Performance?
Home-country evaluations
Host-country evaluations
•Adjusting Performance Criteria
Augmenting job duties
Individual learning
Organizational learning
•Providing Feedback
Debriefing interview
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
The Labor Environment Worldwide
• International Differences in Unions:
The level at which bargaining takes place (national,
industry, or workplace)
The degree of centralization of union-management
relations
The scope of bargaining (parties and issues)
The degree to which government intervenes
The degree of unionization and union strength
The political affiliations of unions
38
HR Management vs. Strategy
HR Strategy
HR Management
Proactive, Long-Term Reactive, Short-Term Focus
Strategic HR Leadership
Tactical HR Management
Approach
Promises & Values Skills & Procedures Drivers
How the brand interacts with the marketplace
What the corporation does in the marketplace
Orientation
Development Hiring Interest
What matters to the
market
What matters to the company
What Matters
Think Globally, Act Locally Market presence first and foremost
Thinking
Differences & Similarities Considered
Blurred view of differences
Views & Values
Company Overview
Best Buy is a specialty retailer of consumer
electronics, home-office products, entertainment
software, appliances and related services.
Corporate Vision
Making life fun and easy. For example, Best Buy
want to help customers find the entertainment
technology that best meets their needs and that
will integrate with their existing entertainment
system to maximize their enjoyment.
Company Overview
Best Buy business strategy
is to bring technology and consumers together in a retail environment that focuses on educating consumers on the features and benefits of technology and entertainment products, while maximizing overall profitability
Best Buy's corporate values
Best Buy has four values that guide Best Buy actions:
• Have fun while being the best,
• Learn from challenge and change,
• Show respect, humility and integrity, and
• Unleash the power of Best Buy people.
Reorganize around aligning the
Employee with the Customer
•Best Buy: Case Study on Customer Centricity
Created five customer group personas
Customized existing stores to cater to specific
customer groups
Centric system for training employees
Created niche stores for customer groups
Source: The Washington Post
Systematic Focus Strategy
To align your corporate value proposition with the interaction between the internal and external customers to create a brand with distinctive
personality that fulfills its promise.
© 2014 Dr. Salah S. Hassan, Ph.D.. All rights reserved.
Internal Customers
Value Proposition
External Customers
Making the Brand’s Personality Distinctive
MARKET REALITIES
HR Strategies
The HR strategy for a firm reflects the number
and nature of common or distinctive
characteristics of internal as well as external
customers applied to the portfolio of offerings
across a given marketplace.
The Marriott Case
Marriott Offerings Value Proposition
Ritz Carlton
Personalized service & prestige
Marriott Hotels
& Resorts
Upscale, premium, fine dining
Courtyard by
Marriott
For business travelers
Fairfield by
Marriott
Consistent quality, continental
breakfast
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